Investors in Japan started the day on a rather positive note, with the Nikkei opening 0.04 percent higher after making losses in the past six days. But concerns over the local economy continued to weigh on investor sentiments.

Official data had shown that Japan's economy contracted 0.9 percent in the three months ending September. The data, which followed a number of other weak economic indicators, have raised speculations that the country may be on the brink of recession.

"We expect no major improvement in the export environment before the end of 2012, and thus we see a high likelihood of further GDP contraction in Q4," said analysts at Nomura Research in Tokyo. Two straight quarters of economic contraction is commonly considered as an indicator of recession.

US Markets had closed the previous session lower on concerns over the 'fiscal cliff', a combination of budget cuts and tax hikes that will come into effect in the next year. Reports suggest that the country's lawmakers have set a seven-week deadline to reach a consensus to solve the issue.

Concerns over the Greek economy continued. Despite the Athens agreeing to a tight budget, the eurozone ministers who met in Brussels did not unlock the much-needed monetary aid for the country. European Union officials and eurozone finance ministers will consider the issue again on November 20.